Forget patriotism. Made in America has been good for the bottom line.
Forbes is out with a new ranking of the “Richest Self-Made Women,” and Carolyn Rafaelian made the cover.
You might not know her name, but you certainly know her work. Rafaelian is the founder of Alex and Ani, the hugely popular jewelry company known for its collectible brass bangles and charms.
Rafaelian started Alex and Ani in a basement in her father’s jewelry factory in Rhode Island in the 1990s. Ralph Rafaelian had been making costume jewelry since the 1960s, but like many American manufacturers, ran into tough times as many jewelry makers shipped production overseas.
Around that time, Carolyn Rafaelian launched a small business of her own, designing private label jewelry for stores like Express and Victoria Secret. That work kept the lights on (and folks employed) in her father’s factory – and in the meantime, Rafaelian started work on her own Alex and Ani line, named after her daughters.
Her side project soon took off. In 2004, Rafaelian patented the company’s famous bangle, and a series of key business decisions allowed the company to grow. Today, Alex and Ani is worth $1.2 billion.
What makes Alex and Ani’s trajectory so interesting is that while American manufacturing is at the heart of it, Rafaelian doesn’t manufacture in Rhode Island for sentimental reasons. She does so because it continues to make good business sense. Forbes breaks it down:
“Through it all, Rafaelian continued to keep every part of the process — from design to casting and soldering to marketing — within a few miles of the company's Cranston headquarters.
Her dad's Cinerama factory was suddenly humming and expanding exponentially, with row upon row of workers fashioning bangles by hand. Like fine jewelry purveyor Tiffany & Co., Alex and Ani controls its entire supply chain. Says Cleaveland: ‘They're skipping the middleman.’”
Alex and Ani isn’t the only trendy American manufacturer gaining notice these days. Apparel maker American Giant also continues to make waves, as Ad Week recently profiled company founder Bayard Winthrop.
American Giant, perhaps most famous for its hoodie, manufactures its products in North Carolina. In fact, Winthrop launched American Giant in 2011 after being repeatedly told that nobody would be able to make a sweatshirt in the United States anymore.
But while a desire to make things in the United States initially drove Winthrop, smart business choices are driving his company’s success today, Ad Week explains:
"Mere fad items don’t sustain momentum as long as American Giant has, so there has to be more going on here. First, by bringing an artisanal approach to an ordinary garment, Winthrop has proven that innovation—not invention—sets trends. He’s also demonstrated that, fast fashion be damned, consumers are willing to pay for quality and for American-made goods.
However, that’s true only to a point. As a recent AP-GfK poll discovered, while 75 percent of consumers say they want to buy American-made goods, the majority still winds up choosing whatever’s cheaper. The recent collapse of the American Apparel brand would appear to confirm that finding.
The success of American Giant, then, seems more attributable to a formula than to a single selling point. 'Customers are going to buy on price and fit and quality,' Winthrop says. 'If they can [find] all of those things and a brand that’s American made, they can fall in love with the brand. [But] if you’re not competing with price and quality, it’s all over.'"
There’s no doubt that American manufacturing is having a moment, and many companies are trying to take advantage of that by doing a bit of clever public relations work. But it’s unclear how long Made in America will be in vogue, and some worry that there might even be a backlash.
That’s why companies that truly want to make American manufacturing work would be smart to look to Alex and Ani and American Giant for insight.
What the continued success of the two companies shows is that while American manufacturing can indeed be good for business, it can’t be used as a PR stunt. It needs to be part of the overall business model, and smart decisions must be made.
This is particularly important in the retail sector, which is undergoing a tremendous shift. Consumers, particularly millennials, are no longer browsing malls and making impulse buys. They are looking for specific items that can help express who they are.
Alex and Ani and American Giant found their success through specialized products – bangles and hoodies, respectively – that spoke to their customers (Forbes notes that Alex and Ani’s charms tattoo your body without any actual tattoos).
The two companies also made strategic decisions about where to sell their products rather than merely trying to offer them in every store in the country; American Giant is still only available to buy online.
And now both are expanding in a way that makes sense. Alex and Ani has slowly moved beyond bangles, selling a range of jewelry alongside clutches and even candles. American Giant unveiled its first-ever dress this spring, earning a slew of rave reviews.
“If these pieces are anything like the rest of the American Giant products we've fallen for, we're sure to wear them again and again — and you can, too,” Refinery 29 wrote. “Now's the time to stock up.”